Managerial Economics Case Study
Budget: $10 – $30 USD
Model the relationship between the quantity of roses sold, dozens, and its potential determinants. Your answer should address two issues:
First, the selection of the independent variables in your model should be based on theoretical and empirical bases. For example. What is the economic rationale for including the average wholesale price of roses, and whether the estimated coefficient on the variables is statistically significant.
Second, you need to choose between a linear regression model (the regressand is a linear function of the regressors), or a log–linear regression model (the log of the regressand is a function of the logs of the regressors) is a perennial question in empirical analysis. You can use
a test proposed by MacKinnon, White, and Davidson, which we call the MWD test for brevity, to choose between the two models
First, the selection of the independent variables in your model should be based on theoretical and empirical bases. For example. What is the economic rationale for including the average wholesale price of roses, and whether the estimated coefficient on the variables is statistically significant.
Second, you need to choose between a linear regression model (the regressand is a linear function of the regressors), or a log–linear regression model (the log of the regressand is a function of the logs of the regressors) is a perennial question in empirical analysis. You can use
a test proposed by MacKinnon, White, and Davidson, which we call the MWD test for brevity, to choose between the two models